Because Volvo’s sales have been slower than predicted, the automaker intends to reduce its auto production in Sweden to about 10% and to cut 200 to 300 jobs, according to a union official. The management had reportedly informed staff that the sluggish sales will result to a reduction in production, said Michael Blohm of the IG Metall blue collar union at Volvo's Torslanda plant in the western city of Gothenburg.
He said that the company seeks to decrease its output, from 57 cars each hour to 50 or 52. He said that this would mean that the contracts of 200 to 300 workers, who are from a recruitment company, won’t be extended. He said that the management had said that sales had fallen before the summer break.
But upon coming back, sales declined even further. He added that around 2,000 staff members work on Torslanda’s production line. He said that the plant has been shut down for four days before the annual mid-year break, which also led to the drop in production. China's Zhejiang Geely had bought Volvo from Ford Motor Co. in 2010 for $1.8 billion.
It said that it seeks to raise annual sales by 2020 to 800,000 from slightly more than 400,000 cars currently. This target includes the sales of 200,000 units in China, a huge jump from the 47,000 units reported sales in the country in 2011. Volvo has yet to comment on this report. ACEA’s figures show that Volvo car sales in the EU and EFTA countries decreased by 8% in the January-June period to 126,826 units.